Annual Report 2008 in PDF - GKN

116
Notes to the Financial Statements
continued
26 Post-employment obligations continued
Movement in schemes’ assets during the year
UK Americas Europe ROW Total
£m £m £m £m £m
At 1 January 2008 2,248 212 21 14 2,495
Expected return on assets 144 17 1 1 163
Actuarial gains and losses (539) (87) — (4) (630)
Contributions by Group 22 12 1 2 37
Contributions by participants 7 — — — 7
Benefits paid (123) (11) (1) (2) (137)
Currency variations — 59 7 8 74
At 31 December 2008 1,759 202 29 19 2,009
At 1 January 2007 2,187 196 19 13 2,415
Subsidiaries acquired — — — — —
Expected return on assets 131 14 1 — 146
Actuarial gains and losses 21 — (1) (1) 19
Contributions by Group 19 15 1 2 37
Contributions by participants 11 — — — 11
Benefits paid (121) (11) (1) (1) (134)
Currency variations — (2) 2 1 1
At 31 December 2007 2,248 212 21 14 2,495
The defined benefit obligation is analysed between funded and unfunded schemes as follows:
UK Americas Europe ROW Total 2007
£m £m £m £m £m £m
Funded (2,031) (354) (20) (39) (2,444) (2,528)
Unfunded (12) (47) (333) (7) (399) (298)
(2,043) (401) (353) (46) (2,843) (2,826)
The fair value of the assets in the schemes and the expected rates of return were:
UK Americas Europe ROW
Long term Long term Long term Long term
rate of rate of rate of rate of
return return return return
expected Value expected Value expected Value expected Value
% £m % £m % £m % £m
At 31 December 2008
Equities (inc. hedge funds) 8.0 667 8.5 125 — — 5.6 7
Bonds 5.3 912 5.5 70 — — 1.6 8
Property 6.8 80 — — — — — —
Cash/short term mandate 2.0 74 4.4 7 — — 1.1 2
Other assets 6.5 26 — — 5.6 29 0.9 2
At 31 December 2007
1,759 202 29 19
Equities (inc. hedge funds) 8.0 1,114 8.5 142 — — 6.2 8
Bonds
Property
5.1
6.7
810
102
5.5
—
57
—
—
—
—
—
1.3
—
4
—
Cash/short term mandate 5.7 190 4.7 13 — — 1.0 1
Other assets 5.8 32 — — 5.1 21 0.9 1
2,248 212 21 14
The expected return on plan assets is a blended average of projected long term returns for the various asset classes. Equity returns are
developed based on the selection of the equity risk premium above the risk-free rate which is measured in accordance with the yield on
government bonds. Bond returns are selected by reference to the yields on government and corporate debt, as appropriate to the plan’s
holdings of these instruments, all other asset classes returns are determined by reference to current experience.
The actual return on plan assets was negative £467 million (2007 – £165 million positive).
GKN plc Annual Report 2008
2008